When a Check Is Deposited in the Payee's Own Account

question 25

True/False

When a check is deposited in the payee's own account in a depository bank,any settlement given by the depository bank is provisional until the next banking day at midnight.

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Definitions:

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenditure to the correct periods.

Periodic Inventory System

An inventory accounting system where the inventory count is physically conducted at specific intervals, typically at the end of an accounting period.

Net Method

An accounting method that records purchases and sales of inventory net of discounts at the time of transaction.

Credit Terms

Conditions under which credit is extended to a buyer, including the repayment time frame, interest rates, and penalties for late payment.